When it comes to managing multifamily properties, most investors obsess over maximizing rents, reducing vacancy, keeping expenses under budget, and managing construction projects.
All important, sure.
But there’s ONE critical metric that impacts your NOI more than anything else… and most investors aren’t tracking it properly.
I’m talking about turnover.
Not just the percentage, but the actual COST of each turnover event at your properties.
The True Cost Of Turnover
When I first ran the numbers on what each unit turnover was costing one of our properties, I was shocked. It was like watching money disappear faster than ice cream on a hot summer day.
Each time a tenant doesn’t renew their lease, you’re not just losing a month’s rent. The total hit to your bottom line includes:
- Lost rent during vacancy periods
- Leasing commissions to find new tenants
- Unit renovation costs (which can vary widely)
- Utility costs that shift back to you
- Administrative time and resources
When you actually crunch the numbers, each turnover costs between $4,000-$7,000, depending on your market and rental rates.
Think about that – if you have 10 additional turnovers per year on a 100-unit property, that’s potentially $70,000 straight off your bottom line.
The Domino Effect On Your Investment
This single metric creates a cascade of problems:
- Decreased NOI
- Reduced free cash flow
- Lower property valuation
- Inconsistent investor distributions
What Successful Operators Do Differently
The most successful operators I know have systematic approaches to:
- Maximize renewals through strategic lease offers and resident satisfaction programs
- Reduce evictions with better upfront screening
- Price units appropriately (not above market) to attract quality, long-term tenants
- Minimize vacancy periods through efficient turnover processes
Want to master this critical aspect of asset management?
I recently had an eye-opening conversation with Stacey Hampton, a multifamily operations expert with over 25 years of experience, who broke down exactly how to tackle this problem.
#279: How Much Turnover is Costing You, The One KPI Operators Need To Track, Maximizing Renewals, & More with Stacey Hampton. Listen to the episode on iTunes or Spotify!
In our podcast episode, Stacey shares:
- How to calculate the TRUE cost of turnover for your specific properties
- The surprising KPI that top operators track (that most investors ignore)
- Practical strategies to reduce delinquencies and increase renewals
- The best tech tools that immediately improve cash flow
This is honestly one of our most tactical, value-packed episodes to date. Whether you’re an active operator, asset manager, or passive LP, you’ll walk away with insights you can apply immediately.